Managing the workload

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My two top guys are worried about workload, which regularly goes from too much to not enough. I think part of the problem is one unreliable guy, but they tell me they can’t survive without him. I have to make sure everyone is properly trained, but training slows things down. If we staff up to handle time for training, by the time we finish training, there won’t be enough work for everyone. Seems like we can never get the balance just right.

Thoughts of the Day: Make sure each person on your operations team is in the right job. Measure workload and productivity in reports that everyone can see. Weed out misfits as the workload slows down. Hire and train before it gets busy. Set a goal that everyone can get behind.

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Managing the warehouse equals profits

Our warehouse — it’s substandard. Inventory is too high. Things get lost. We can’t find what we need when we need it. We know there are related issues. How do I fix it?

Thoughts of the Day: You can’t do it all. The right employees can make a huge difference. Set up procedures. Invest in tools. Consider farming out the warehouse function. Make time to learn about best practices in your industry.

Customers depend on their vendors to get them what they need, when they need it, no excuses. Managing the volume, cost and markup on materials that go to customers can impact profits and customer satisfaction.

Someone has to be in charge of the warehouse. It shouldn’t be the owner who has bigger issues to solve, including how best to handle inventory to meet customer needs as the company grows.

Reflect on who you have or should have in the warehouse. Here are some questions to evaluate warehouse personnel.

  • Do they like keeping track of details?
  • Do they have a high need to be right?
  • Can they look at reports and compare reports to physical counts?
  • Can they multitask?
  • Do they have the communication skills to deal with vendors?
  • Can they command the respect of co-workers?
  • Do they have the strength and stamina to keep up with the workload?
  • Are they willing to take charge and accept responsibility?
  • Can they blow the whistle or ask for help if there’s a problem?
  • Will they grab onto automation?
  • Will they work extra hours if needed?

Inventory management starts with calls for supplies. Log orders into a system. After delivery, verify that the vendors’ quotes match the bills you receive. Log specific inventory pieces out as they’re used and make sure they’re charged to the client who will benefit.

Have supplies come to a central location. Make someone responsible for accepting delivery. That person ensures everything is received as ordered and in good shape.

Keep control with a check-in/check-out system. Limit the number of people who can walk into the warehouse. Keep shelves neat and well labeled to help spot when inventory is low and needs to be reordered, as well as to identify inventory that builds up and needs to be moved out. Keep moving older inventory to the front of the warehouse and put someone in charge of finding ways to use it up.

Inventory tools can reduce waste and days of goods on hand. Days that goods sit around, instead of being put to work and charged off to the client, ties up money that could be used elsewhere in the business. Waste costs more than 100 percent because of lost opportunity.

There are lots of tools on the market to track inventory. Scanners and bar coding save time and increase accuracy. GPS systems on pallets help track goods on and off trucks and at clients’ sites. Using iPads and truck stocking systems helps make inventory management in real time.

If you’re not prepared to manage inventory, consider outsourcing. Some vendors will receive, store and later deliver the finished goods to your clients. Others will stock your trucks or ship via common carrier when you request it. Bulk centers can streamline processes and take advantage of staffing efficiencies. You still have to periodically audit to ensure they’re not wasting or losing items. If you have lots of goods coming in and going out, consider cross docking to speed the turnaround — especially important when dealing with perishable items.

Whatever solution you choose, set goals. Reduce the time goods sit, cut down on waste and increase ability to service customers by having exactly the right inventory all the time.

Turn to your industry association for ideas on best practices. Team up with companies larger than yours, who can show you what they’ve invested in. Hire experts to help you plan your warehouse of the future. Have a vision of where you want to go.

Looking for a good book? Try “Warehouse Management: A Complete Guide to Improving Efficiency and Minimizing Costs in the Modern Warehouse” by Gwynne Richards.

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Managing Your Workforce Through Business Cycles

I don’t know what to do in the slow months. Trying to hang on to when we’re slow has left us stretched for cash going into the next busy cycle every year. But it’s getting harder to find good new people and I don’t want to lose people after we’ve worked so hard to train them. I also don’t want to get caught short with too few people to handle our next busy period.

Thoughts of the Day: Businesses with cycles have to have a full-year game plan. Be realistic about what you can and cannot afford to do. Figure out why it’s so hard to make enough profit and then work on that root cause.

Peaks and valleys of income can be really hard for a variety of reasons. Employees cost money even when they’re not working full tilt. Businesses look most profitable at the end of a busy season, when they’re about to become least profitable because of a down season. Overhead costs don’t go away just because the volume of work drops off. Escalating vendor costs chew up profits when sharper negotiation would have headed those costs off. Few businesses have enough in reserves, nor do they have a plan to build more. Some owners take too much out of the business at the end of a busy season and get caught short. Last of all, most business owners don’t understand how much profit they really do, or don’t, earn.

You do have options. Flex hours, job sharing, telecommuting, sabbaticals, time off for education and extended vacations can all be tools in your arsenal. So can looking to share employees with other companies that have cycles opposite yours. And of course unemployment insurance is meant to soften the blow for employees who have to deal with seasonal work opportunities.

Know how much you can afford in excess payroll during the slow months. Build a plan to keep people busy with cross-training, skill building and vacations. Ask people if they want to take off extra time, on their dime —you may be surprised to find that extra time off is valuable — especially to millennials.

Manage the total workload. Schedule service and other routine work for slow times. When busy, resist the temptation to go to overtime, which burns up cash. Put busy time profit into reserves to make payroll when it’s slow.

Make sure employees understand and are supportive of your strategy. Make it clear they can’t have it both ways; lots of overtime or excess spending during busy periods eliminates the possibility of full pay during slow times. If cuts are necessary, ask employees to choose: let go of some people, or share the pain by reducing everyone’s hours enough.

Do reviews of job profitability and overall employee performance at the end of a busy season. Match reviews up with work downturn and make tough, but necessary, decisions on whom to cut.

Set a goal for payroll-to-invoices ratio. As work winds down, have a plan for who goes and who stays. Resist the temptation to wait too long; every week you overspend on payroll eats away at reserves.

If you do furlough people you’d want to bring back when it gets busy, make sure to get their slow season contact information. Start recruiting for the busy season when things are really quiet. Don’t wait. Stagger employee returns, a few each week, until you’re back at peak workforce.

Make sure you’re actually charging enough for the work you do. It costs money to flex a workforce up and down. If the business winds up unprofitable at the end of each season, ask your employees to help you figure it out. Focus on fixing the root causes, so you don’t have to keep dealing with the craziness of the ups and downs. After all, your job as owner is to be realistic and manage the business for the long term.

Looking for a good book? Try “Strategic Workforce Planning: Guidance & Back-up Plans” by Tracy Smith.

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Eliminating Disruptions in Shift Work

We run a couple different shifts most days. We’re finding information doesn’t get shared. We end up duplicating effort as one shift re-does what another shift was supposed to take care of. Not everyone gets here at the same time, so it’s hard to have a meeting. What suggestions do you have to make this work smoother?

Thoughts of the Day: Plan out the work schedule. Plan out what to do when someone inevitably doesn’t show up for a shift. Use notes that turn into checklists to document what’s been done and what still needs to be done. Assign shift supervisors with overlapping check-in and checkout times who must clear up any issues before heading home. Finally, think about a different approach.

Scheduling is both art and science. If possible, buy some scheduling software. Most industries have systems that have been customized. Check with your national industry association to see if they have any recommendations.

Have a go-to person who oversees and approves all of the schedules. It’s this person’s job to match workload and personnel. Make sure this person is good at providing write-ups of what has to happen since they won’t always be on site and the shift supervisors need direction on what work they’ll have to handle.

Put one person on each shift in charge of quality and compliance and another person in charge of inventory. These two also need to be able to work with software to track and report. If possible get an inventory system in place that the scheduler and inventory manager can both look at to know what’s in stock and what needs to be ordered to help them plan out what each shift needs to work on. The quality manager checks that work is completed on time, is error free and provides feedback to shift supervisors. Make it clear what has to happen if employees want to swap shifts. Who do they go to for permission and how does permission get recorded so everyone is on board? What do replacements need to know and how are they informed? Is there any specific training /certification needed for a replacement to be eligible? What does the original shift worker have to do to ensure their work is properly covered?

Keep a schedule that everyone can access. If everyone doesn’t have access to a computer, post a daily roster — looking ahead at least two weeks. Show replacements by crossing out the original worker’s name, so that everyone knows who is responsible for ensuring the shift is covered.

In case of breakdown, make it the original shift worker’s responsibility along with the person who agreed to cover the shift to diagnose and prevent problems in the future. Meet with both to discuss the breakdown and ask them how they could have avoided the problem. Put suggestions in writing and make them part of the policy manual, which gets distributed to everyone.

Set aside time to cross train people so they can step into each other’s jobs. Have day-shift people train on the evening shift, and vice versa, as there’s a different boss, rhythm and set of tasks that have to be dealt with on each shift.

As much as you want teams to be self-managing, you still need points of contact. Make shift supervisors the primary point of communication between shifts. Everyone feeds them information about what’s going on before, during and after each shift. It’s their job to work with their teams and each other to smooth out disruptions.

Any time there is a change in shifts, that’s a disruption to work flow. Disruptions equal loss of productivity. Investing in equipment necessary to have more people work at one time may be less costly than dealing with constant interruptions from shift changes. Think about asking employees to work longer hours but fewer days — people may enjoy having more days off during the week and can be more focused during the concentration of work days.

Looking for a good book? Try “Work Rules! Insights from Inside Google That Will Transform How You Live and Lead” by Laszlo Bock.

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How to Please Big Clients

We have been struggling on the big accounts — not understanding their needs well enough, not profitable enough, not on time and coming in over budget sometimes. Big clients aren’t especially happy with us these days. How do I prevent this from seriously damaging our business?

Thoughts of the day: Correctly diagnosing the situation is crucial. Symptoms often show up internally as the producing company notices problems before the recipient buyer sees them. There are real dollars attached to ensuring customers are satisfied.

Make sure to follow these rules for diagnosing the situation. When clients speak, hear them out, as you listen in order to understand, not to rebut. Restate what you heard in order to verify understanding. Ask clients who don’t say much to give you feedback and reassure them that negative feedback is as welcome as positive feedback. Get to work on permanent solutions.

Sometimes the most obvious question is the one that delivers the most actionable information. Ask clients what it would take to make them happy. Just because clients ask for something, that doesn’t necessarily make it a good idea for your company. Set aside time to figure out if you can deliver what they’re asking for or not. Vend out or refer out things that you’re asked to do that don’t make sense for your company.

When your staff tells you there’s a problem with a client, pay attention. Often your people will know that something is wrong long before the client identifies an issue. Look for themes and one-offs: Is the current issue similar to other situations you’ve encountered, or is it unique? Prioritize fixing the repetitive issues. Occasionally look at the unique issues for opportunity to take the business in a new direction.

Always question the source of the problem. Did the issue crop up because of who was buying, how it was sold or the way the solution was delivered? Think through whether this client should have bought from you or whether the solution was oversold. Or, was there a problem delivering something your company produces regularly and should have done a better job of delivering this time.

When looking to expand, remember to sell new products to existing customers. You can trade on a long-standing positive relationship. Existing customers who know and respect the work of your company are more likely to cut you a break if things don’t go well. On the other hand, existing customers may get tired of the same old product and look for new innovations. Keep the relationship fresh with additional offers that will help to keep that client coming back for more.

Use existing products to lure in new groups of clients. Figure out who else might want what your company has to offer. Start off new clients with a strong relationship because you’re offering a product or service that’s well tested and proven.

One researcher, looking at a Fortune 100 company, equated a 1 percent increase in satisfaction to $13 million in increased service contracts. That’s powerful. While your numbers might be smaller, it’s important that everyone in your company understands the link between satisfied clients and continued revenue flow to pay the bills, including everyone’s salary and benefits.

When looking to ensure customer satisfaction, look for consistent holes. Decide if it’s due to a lack of management and oversight, lack of proper planning as to how work will be handled or lack of production skill, quality materials and deliverability. Tackle the problems now, rather than avoiding them, by forming a team of people to work on diagnosing and solving the problems at hand. Make satisfying customers everyone’s job.

Keep in mind that the bigger the client, the bigger the opportunity and the bigger the risk if things don’t go well. Big clients can help your company grow as long as their needs and yours are well-aligned. Make sure the clients you’re struggling with aren’t predators looking to pick apart your company for all it’s worth before moving on to do it to someone else. Instead, look for big clients you can partner and align with to help you and them succeed because of mutual interest and goodwill.

Looking for a good book? Check out… Managing Customer Relationships: A Strategic Framework by Don Peppers and Martha Rogers.

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